Housing Rolling Along 2

[Pa(b)st Prime]

Housing displays the ying and yang that makes free markets so interesting.

On one hand as we all know huge unsold inventory, tougher lending standards and decreasing disposable income due to higher costs of essentials and broader economic weakness are all combining to auction prices lower. On the other hand rent prices are increasing and low returns on competing fixed income investments are an inducement for real estate investors to hold housing longs.

This housing downturn is a textbook example of how markets tend to operate when cheap credit is no longer on the table. Forced liquidation selling is overwhelming the numbers of credit worthy buyers. Just as resale values were insanely stretched to rental prices in 2005 we'll see the pendulum swing to the other extreme. We'll get to a point where it's cheaper to own vs. rent but only those who qualify will have the ability to make the purchase. Just like the old days. Down the road there will assuredly be Ben Graham type opportunities.

I've read a few posts here about the SoCal market. You guys may find useful data in these rental prices from condo.com While resale prices in L.A. seem expensive beyond belief after seeing how high Westside rents are it puts things in a bit of perspective.

http://www.condo.com/ForRent?Location=90046#view=list-map&loc=33390

 

[Cutten]

At the bottom of this cycle we may actually see grade A prime real estate costing less to own than to rent (this is common in average or downmarket areas, but very rare in prime areas). Time to save up for a fat deposit, then trade up to a nice penthouse or mansion at the lows in a couple of years time.

 

[Pa(b)st Prime]

Quote from Cutten:

At the bottom of this cycle we may actually see grade A prime real estate costing less to own than to rent (this is common in average or downmarket areas, but very rare in prime areas). Time to save up for a fat deposit, then trade up to a nice penthouse or mansion at the lows in a couple of years time.

Increasingly I notice a risk premium built in to hillside properies in SoCal. There's becoming MANY properties cheaper to buy than rent in L.A. Keep in mind that the "right" quake, fire or mudslide can eliminate not just your home like in a hurricane but you can lose your property. I've seen two homes for sale above the Sunset Strip priced VERY competatively only to have a geologist say "no way is that place stable"........

 

[jasonjm]

Quote from Pa(b)st Prime:

Increasingly I notice a risk premium built in to hillside properies in SoCal. There's becoming MANY properties cheaper to buy than rent in L.A. Keep in mind that the "right" quake, fire or mudslide can eliminate not just your home like in a hurricane but you can lose you're property. I've seen two homes for sale above the Sunset Strip priced VERY competatively only to have a geologist say "no way is that place stable"........

I hate that area above the sunset strip so bad

windy shitty little roads that take forever to drive on, and make your passenger car sick

I have zero idea why anyone would live there....

 

[Pa(b)st Prime]

Quote from jasonjm:

I hate that area above the sunset strip so bad

windy shitty little roads that take forever to drive on, and make your passenger car sick

I have zero idea why anyone would live there....

Increasingly I agree with you!

I used to think that was the ultimate L.A. experience. Views, close to the amenities of WEHO, BH ect.

Now I'd rather rent a condo.

A question. I know you're really more into the Westwood/Brentwood area but what do you think of West Hollywood and even further SE like around the Beverly Center or the Grove? Also, Is Westwood Village making a comeback?

 

[jasonjm]

Quote from Pa(b)st Prime:

Increasingly I agree with you!

I used to think that was the ultimate L.A. experience. Views, close to the amenities of WEHO, BH ect.

Now I'd rather rent a condo.

A question. I know you're really more into the Westwood/Brentwood area but what do you think of West Hollywood and even further SE like around the Beverly Center or the Grove? Also, Is Westwood Village making a comeback?

Places to buy/live imo are (in no order)

century city, westwood, west LA, cheviott hills, holmby hills, flat parts of beverly hills, flat parts of holmby flat parts of bel air, very north end of santa monica, and brentwood (but flat part of brentwood)

If you don't really have to commute much at all and you like the coastline and like being a bit remote, pacific palisades and malibu are good.


The beverly center/grove are OK.

Also most of my bad debts come from hollywood area, so I really hate that place, I'm always going into there to collect money from the useless bums that seem to always end up living in hollywood area.

I also mentioned that I hate hills and canyons and winding roads. I like living on flat land near stuff.

I'd rather buy a small place (or rent a condo) in one of the better areas, but thats just me.

Anyways I think a good buy time will be like 2011, lets see what all these areas are priced at then. Well, probably makes no difference what the prices are, 2011 is very likely going to be a good time to buy (mortgage resets should mostly be over 2010).

People buying in now are too early IMO

 

[QQQBALL]

Quote from Pa(b)st Prime:

Increasingly I agree with you!

I used to think that was the ultimate L.A. experience. Views, close to the amenities of WEHO, BH ect.

Now I'd rather rent a condo.

A question. I know you're really more into the Westwood/Brentwood area but what do you think of West Hollywood and even further SE like around the Beverly Center or the Grove? Also, Is Westwood Village making a comeback?

move to manhattan beach & forget most of those others places (except maybe the last few). i used to date a chick that lived up in los feliz - awesome views.

in all seriousness, west l.a. sucks - traffic up the ass everywhere and nothing but psuedo-high-brows. we worked outta bldg at holmby & little santa monica. im a beach guy - ill take manhattan beach any day over the Westside unless you're movin' to Belair?

 

[jasonjm]

manhattan beach sucks so bad

ugly as hell
worlds largest sewer plant in it
smokestacks
heavy metals and crap in the water
Insane traffic, you are on the most clogged section of the 405.....

and to top it off, just plain sucky walled surf......

If you going to live all out of the way, I'd pick way north end of malibu / ventura in a second, and its way cheaper.

 

[QQQBALL]

Quote from jasonjm:

manhattan beach sucks so bad

ugly as hell
worlds largest sewer plant in it
smokestacks
heavy metals and crap in the water
Insane traffic, you are on the most clogged section of the 405.....

and to top it off, just plain sucky walled surf......

If you going to live all out of the way, I'd pick way north end of malibu / ventura in a second, and its way cheaper.

oh yeah, like Culver City is heaven on the eyes. buy a Thomas Bros map book - M.B. isnt "on" the 405 fwy & Hyperion is in El Stinko (El Segundo)- i wuddnt say MB is outta the way - Palos Verdes is nice, but it is outta the way.... when i lived in MB (on Strand part of the time), i hardly ever went many other places - if you'er trading outta home, why in the hell would you live on the westside? i tell you honestly, i wuddnt live on the Westside... i used to do a chick who lived there, but that was when i worked in the area.... after we relocated, i wuddnt even go there to get laid. i used to data a chick near the old Gladstone's off of Chittaqua (i know i spelled it wrong), that was sorta okey,
but i was mostly there at night. they also had a house in the Colony. i dont know malibu at all, way outta my price range. if you're pitching Santa Monica, you better discuss the "property rights" issues for the "People's Republic" (of Santa Monica). fricking socialists.

i know you sell the Westside, so its great you believe in the product, but i say "no gracias."

 

[Pa(b)st Prime]

Quote from jasonjm:

Places to buy/live imo are (in no order)

century city, westwood, west LA, cheviott hills, holmby hills, flat parts of beverly hills, flat parts of holmby flat parts of bel air, very north end of santa monica, and brentwood (but flat part of brentwood)

If you don't really have to commute much at all and you like the coastline and like being a bit remote, pacific palisades and malibu are good.


The beverly center/grove are OK.

Also most of my bad debts come from hollywood area, so I really hate that place, I'm always going into there to collect money from the useless bums that seem to always end up living in hollywood area.

I also mentioned that I hate hills and canyons and winding roads. I like living on flat land near stuff.

I'd rather buy a small place (or rent a condo) in one of the better areas, but thats just me.

Anyways I think a good buy time will be like 2011, lets see what all these areas are priced at then. Well, probably makes no difference what the prices are, 2011 is very likely going to be a good time to buy (mortgage resets should mostly be over 2010).

People buying in now are too early IMO

By far the easiest place to find a glut of hi-rise units in amenity buildings is on Wilshire in Westwood. I used to like Westwood Village when I was younger but I keep hearing stories about gangs at night and others say the restaurants are more for UCLA students than older professionals. True?